Workhorse Discloses Potential Merger Talks with Private EV Manufacturer

Workhorse Group (WKHS) is negotiating a potential merger with a private US-based electric vehicle manufacturer. The deal includes a $33 million refinancing and a $20 million sale-leaseback of the Union City facility. Current shareholders would face dilution as the manufacturer's investors gain a majority stake. The transaction also involves the issuance of 3 million new shares and a 14-day exclusivity agreement. Completion is contingent upon shareholder and Nasdaq approvals.

Workhorse Group Inc. (NASDAQ: WKHS), a company focused on zero-emission commercial vehicles, has entered discussions regarding a potential reverse merger with a privately held U.S.-based electric commercial vehicle manufacturer. The transaction, which could significantly reshape the company's capital structure and corporate control, involves several key financial components.

The potential deal would result in the private manufacturer's investors holding a majority stake in Workhorse's common stock. Key financial elements include a refinancing plan for Workhorse's $33 million in senior secured convertible notes and warrants. This would be facilitated through a new convertible note and an approximately $20 million sale-leaseback of Workhorse's Union City manufacturing facility. The company's current debt obligations would be repaid, with the investor receiving 3 million new shares.

Workhorse has signed a 14-day exclusivity agreement with the manufacturer, indicating serious intent to proceed. However, the transaction is subject to multiple contingencies, including the need for shareholder and Nasdaq approval. The potential deal appears to be a strategic move by Workhorse to address financial challenges while maintaining its public listing.

Current shareholders should be aware that the deal would result in substantial dilution and a change in corporate control. The transaction would involve the issuance of 3 million new shares to the investor, potentially altering the investment thesis for existing shareholders.

Workhorse has not agreed to final terms or entered into definitive agreements with respect to the potential transaction. The company has entered into discussions after exploring various alternatives with its investment banks and advisors. Further details and any definitive agreements would be subject to approval by the company's stockholders and Nasdaq.

For more information, stockholders can refer to the proxy statement that Workhorse intends to file with the Securities and Exchange Commission (SEC) once definitive agreements are entered into.

References:
[1] https://www.stocktitan.net/news/WKHS/workhorse-discloses-update-on-potential-l63139dtotjl.html